The Board has six standing committees: Audit, Governance and Nominating, Management Development and Compensation,
Public Affairs, Special Activities, and Executive. The charter of each committee (other than the Executive Committee) is published
on our website. See "Corporate Governance-Governance Documents" on page 22 for information on obtaining a copy.
During 2016, the Board met formally six times, and engaged in other discussions and actions apart from these meetings. The
non-management directors, all of whom are independent, meet in executive session chaired by the Lead Director at the
conclusion of each regularly scheduled Board meeting. In addition, committee members generally meet in executive session,
without management present, at the conclusion of regularly scheduled committee meetings.
Average attendance for
directors at Board and
committee meetings 96.9%
No director attended less than 75% of the total of all Board and applicable committee meetings,
except for Mr. Paliwal. Mr. Paliwal, who was elected at the September 2016 meeting, was unable
to attend the November 2016 Board and committee meetings (the only meetings held in 2016
after his election) due to unforeseen schedule conflicts. All directors are expected to attend the
2017 Annual Meeting of Shareholders. In 2016, all of the directors who were members of the
Board and standing for election at that time attended the Annual Meeting.
The Board's six standing committees are described below. Each committee, other than the Executive Committee, is composed
entirely of independent directors.
AUDIT COMMITTEE
NUMBER OF 2016 MEETINGS: 9
COMMITTEE MEMBERS:
Tracy A. Atkinson, Chair | Robert E. Beauchamp | Letitia A. Long | George R. Oliver | James A. Winnefeld Jr
KEY RESPONSIBILITIES:
Appoint and evaluate the performance and
independence of Raytheon's independent auditors;
Oversee the integrity of our financial statements;
Oversee our internal audit function;
Consider the adequacy of our internal controls and the
objectivity of financial reporting;
Review the independent auditors' audit of the
effectiveness of Raytheon's internal controls;
Pre-approve all audit fees and terms for, as well as all
non-audit engagements with, the independent auditors;
Review annual and periodic reports and earnings press
releases and recommend to the Board whether the
annual audited financial statements should be included in
Raytheon's Form 10-K;
Review and discuss with management Raytheon's riskassessment
and risk-management policies, including
enterprise risk management and major financial risk
exposures, and steps to monitor and control such
exposures;
Review the performance of Raytheon's pension plans and
risks related to those plans;
Establish and review procedures for employees and
others to confidentially and anonymously report concerns
or complaints regarding accounting, internal control or
auditing matters; and
Review compliance with our Code of Conduct with
respect to certain financial reporting, controls and
allegations of financial misconduct.
The Board has determined that each member is independent in accordance with NYSE and SEC rules applicable to audit
committee members. The Board also has determined that each of Ms. Atkinson and Messrs. Beauchamp and Oliver is an
"audit committee financial expert," as defined by SEC rules, and that all members are "financially literate" under the
NYSE standards.
The Audit Committee Report is included on page 64.
GOVERNANCE AND NOMINATING COMMITTEE
NUMBER OF 2016 MEETINGS: 9
COMMITTEE MEMBERS:
Stephen J. Hadley, Chair | Dinesh C. Paliwal | Michael C. Ruettgers* | William R. Spivey
KEY RESPONSIBILITIES:
Review and report to the Board with regard to matters of
corporate governance;
Make recommendations to the Board regarding the size
and composition of the Board;
Establish procedures for nominating directors and
recommend candidates for election to the Board;
Consider director nominees proposed by shareholders;
Review our Governance Principles and recommend
revisions to the Board;
Review and approve or ratify transactions and
relationships under our Related Party Transactions Policy;
Review shareholder proposals in connection with our
Annual Meetings and recommend actions to the Board
regarding such proposals;
Oversee the orientation program for new directors and
the continuing education program for existing directors;
and
Review and recommend to the Board the compensation
of non-employee directors.
The Board has determined that each member is independent in accordance with NYSE rules.
*Mr. Ruettgers will be retiring from the Board effective May 25, 2017.
MANAGEMENT DEVELOPMENT AND
COMPENSATION COMMITTEE (MDCC)
NUMBER OF 2016 MEETINGS: 6
COMMITTEE MEMBERS:
William R. Spivey, Chair | Robert E. Beauchamp | Stephen J. Hadley | George R. Oliver
KEY RESPONSIBILITIES:
Review and oversee compensation and benefits, as well
as personnel plans, policies and programs;
Review and recommend to the Board the compensation
of the CEO and the other four most highly compensated
executive officers (the "NEOs");
Review and approve the compensation of other officers
and key employees;
Periodically review succession plans for the CEO and
other executive officers and elected officers as well as
career development plans for elected officers and other
key employees;
Administer and make awards, other than to directors,
under our equity compensation plans;
Review and discuss with management the
"Compensation Discussion and Analysis" section of this
proxy statement;
Review Raytheon's incentive compensation arrangements
to ensure they are not reasonably likely to encourage
inappropriate risk-taking;
Appoint, compensate and oversee any outside
compensation consultant, outside legal counsel or other
committee adviser; and
Annually assess the independence of its outside
compensation consultants or advisers, and pre-approve
any services proposed to be provided by such consultants
or advisers to Raytheon.
The Board has determined that each member is independent in accordance with NYSE rules.
Letitia A. Long, Chair | Tracy A. Atkinson | George R. Oliver | Dinesh C. Paliwal
KEY RESPONSIBILITIES:
Review political, social and legal trends and issues that
may affect Raytheon's business, operations, financial
performance or public image;
Review our policies and practices in the areas of legal,
regulatory and social responsibility, including those
involving:
environmental protection;
health and safety of employees;
ethics;
export control;
regulatory compliance (except financial matters);
charitable contributions and community relations;
government relations and legislative policy;
political contributions and lobbying;
anticorruption and foreign and domestic consultants
and representatives; and
government contracting and defense procurement
policies; and
Review and monitor corporate policies and practices that
relate to public policy.
The Board has determined that each member is independent in accordance with NYSE rules.
SPECIAL ACTIVITIES COMMITTEE
NUMBER OF 2016 MEETINGS: 7
COMMITTEE MEMBERS:
Vernon E. Clark, Chair | Stephen J. Hadley | Letitia A. Long | Michael C. Ruettgers* | James A. Winnefeld, Jr.
KEY RESPONSIBILITIES:
Review Raytheon's programs, activities and potential
acquisitions involving classified business activities;
Review policies, processes, practices, procedures, risk
management and internal controls applicable to
Raytheon's classified business;
Review Raytheon cybersecurity, including with respect to
our internal IT systems, products, programs and factories;
Review any critical technology gaps and how Raytheon is
addressing such gaps; and
Support the MDCC, as required, in the review of talent
development/succession planning for key technology
positions.
The Board has determined that each member is independent in accordance with NYSE rules.
*Mr. Ruettgers will be retiring from the Board effective May 25, 2017.
EXECUTIVE COMMITTEE
The Executive Committee is empowered to act for the full Board during intervals between Board meetings, with the exception
of certain matters that by law may not be delegated. The Executive Committee did not meet in 2016.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors who served as members of our MDCC during fiscal year 2016 were Robert E. Beauchamp, Stephen J. Hadley,
George R. Oliver, and William R. Spivey. None of these members is or has ever been an officer or employee of Raytheon. To
our knowledge, there were no relationships involving members of the MDCC or our other directors that would constitute a
compensation committee interlock.
